Biden’s next climate rule could catapult EVs

Your guide to the political forces shaping the energy transformation

Apr 10, 2023 View in browser   By Arianna Skibell Traffic backs up on the Kennedy Expressway in Chicago. | Scott Olson/Getty Images President Joe Biden is redoubling efforts to slash the country’s single largest contributor to climate change: transportation pollution. But a new rule that could significantly boost electric vehicle sales, which the administration is expected to release Wednesday, is worrying automakers and spurring concerns about the availability of minerals needed to power EVs, write POLITICO’s E&E News reporters Hannah Northey, Timothy Cama and Emma Dumain. “This requires a massive, 100-year change to the U.S. industrial base and the way Americans drive,” said the Alliance for Automotive Innovation, which includes auto giants such as Ford and General Motors. The new auto pollution limits are designed to ensure that electric cars account for as much as 67 percent of new passenger vehicles sold by 2032, the New York Times reported Saturday. That would be a jump from Biden’s earlier goal that electric vehicles account for half of all new cars sold by 2030 — and it’s a massive leap for a country where a mere 5.8 percent of vehicles sold last year were electric. Bloomberg first reported on the forthcoming rule. Still, the move is not unprecedented. The European Union is working to phase out the sale of gasoline-powered vehicles by 2035. The United Kingdom and Canada have proposed similar measures, as have automakers such as Ford. That doesn’t make it easy to do. Even manufacturers that have invested heavily in electric models are facing supply chain problems that have stalled production. The scarce availability of minerals needed to make car batteries isn’t helping. And many auto companies worry that consumer appetite just isn’t there. The Treasury wrench: Further complicating matters is recent federal guidance that will limit the availability of a $7,500 tax credit that would make electric vehicles more affordable. The credit, provided by last year’s mammoth climate law, is intended to increase consumer demand. But it also aims to boost the number of electric vehicles made and sourced inside the United States. The Treasury Department’s proposal for enforcing that second goal means many EVs will no longer qualify for the credit starting April 18. Can EPA and Treasury meet both their goals at the same time? Other obstacles: Accelerating the adoption of electric cars in the U.S. would require other major changes. Those include building out the nation’s troubled network of charging stations and revamping the electric grid to accommodate the extra energy needed to power a new fleet of vehicles. The new EPA rule, which is far from final, will also likely be met by a bevy of lawsuits. If the relevant industries mobilize to enact the president’s ambitious goal, however, the country could slash significant amounts of planet-warming pollution — which scientists agree is necessary to stave off the worst of climate change.   It's Monday— thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net. Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: James Bikales breaks down why the Treasury Department delayed issuing an upcoming set of rules aimed at stopping China and other “foreign entities of concern” from dominating the supply chain for electric vehicles. Power Centers POLITICO illustration/Photos by iStock Hydrogen hubs The Energy Department will review dozens of proposals to build the nation’s first “hubs” of low-carbon hydrogen, a critical step in determining how much the fuel could cut planet-warming emissions and which companies would benefit from its deployment, writes David Iaconangelo. Funded with $8 billion from the 2021 infrastructure law, the hubs are designed to demonstrate the production, storage, transport and consumption of “clean” hydrogen made with less than half the carbon emissions of natural gas-derived fuel. Financial considerations The world’s financial heavyweights will gather in Washington this week to reimagine how the world will underwrite the challenges of the 21st century, writes Sara Schonhardt. The spring meetings between the World Bank and International Monetary Fund will focus on revamping a nearly 80-year-old system so it can better tackle climate change, debt distress and other pressing problems. South Caucasus tension In an effort to reduce its reliance on Russian fossil fuels, Europe signed a deal last summer to double its natural gas purchases from Azerbaijan by 2027, writes Gabriel Gavin. But the agreement could be under threat after the EU sent a civilian mission to help police the Armenian side of the border with Azerbaijan. The two countries are at war, and the move angered Azerbaijan. In Other News Impacts: Scientists have documented an abnormal and significant surge in sea levels along the U.S. Gulf and Southeastern coastlines. Dwindling resources: Rich people use so much water that it could threaten supply.   GO INSIDE THE 2023 MILKEN INSTITUTE GLOBAL CONFERENCE: POLITICO is proud to partner with the Milken Institute to produce a special edition "Global Insider" newsletter featuring exclusive coverage, insider nuggets and unparalleled insights from the 2023 Global Conference, which will convene leaders in health, finance, politics, philanthropy and entertainment from April 30-May 3. This year’s theme, Advancing a Thriving World, will challenge and inspire attendees to lean into building an optimistic coalition capable of tackling the issues and inequities we collectively face. Don’t miss a thing — subscribe today for a front row seat.     Subscriber Zone A showcase of some of our best subscriber content. Wind turbines spinning next to power lines near Whitewater, Calif., on Feb. 22. | Getty Images California will need to add more than $9 billion worth of new transmission infrastructure to avoid blackouts while also meeting clean energy goals. States are fighting for more influence in governing the power grid after power outages, rising energy bills and new low-carbon resources have left them scrambling to keep up. Young people suing Hawaii’s transportation agency over its climate record will soon get their day in court. That's it for today, folks! Thanks for reading.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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